First Thing Today | September 12, 2023

Good morning!

Grains mostly weaker overnight... Corn, soybeans and the winter wheat markets have turned weaker this morning after two-sided trade earlier in the overnight session. As of 6:30 a.m. CT, corn futures are trading mostly a penny lower, soybeans are 7 to 8 cents lower, winter wheat markets are 4 to 5 cents lower and spring wheat is steady to a penny higher. Front-month crude oil futures are around 60 cents higher and the U.S. dollar index is up around 300 points.

September crop reports out later this morning... Analysts expect USDA to cut its corn and soybean crop estimates in the Crop Production Report at 11:00 a.m. CT. The September crop estimates will include USDA’s first objective yield (field) samples for corn and soybeans. NASS will also adjust acreage if needed. Based on FSA data, we expect an increase in corn acres and little change for soybeans. FSA data suggests NASS will cut cotton acreage and abandonment is also expected to rise. That could produce a cotton crop estimate well below the initial forecast in August. Given the expectations for smaller crop estimates, traders anticipate USDA will also cut its new-crop ending stocks forecasts.

Cordonnier cuts soybean yield, crop estimates... Crop consultant Dr. Michael Cordonnier trimmed his soybean yield 0.5 bu. to 49.5 bu. per acre, noting hot and dry conditions sped up maturation of soybeans, especially in drier areas of the western Corn Belt. That lowered his soybean production estimate to 4.08 billion bushels. Cordonnier left his corn yield and production estimates at 173 bu. per acre and 15.01 billion bu., respectively, though he has a neutral to lower bias toward the crop.

Corn, soybean CCI ratings continue late-season slide... When USDA’s weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 1.0 point to 336.1, which as 4.1 points (1.2%) below last year on this date. The soybean crop fell 2.1 points to 333.4, which was 8.8 points (2.6%) below last year. Click here for details.

Crop progress report highlights… Following are highlights from USDA’s crop progress and condition update as of Sept. 10.

• Corn: 97% dough (96% average); 82% dented (78% average); 34% mature (28% average); 52% good/excellent (53% last week).
• Soybeans: 31% dropping leaves (25% average) 52% good/excellent (53% last week).
• Cotton: 98% setting bolls (98% average); 43% bolls opening (42% average); 8% harvested (7% average); 29% good/excellent (31% last week).
• Spring wheat: 87% harvested (87% average).
• Winter wheat: 7% planted (7% average).

China raises corn, soybean import forecasts... China’s ag ministry raised its 2022-23 corn import forecast by 500,000 MT to 18.5 MMT, though that would still be down 3.39 MMT (15.5%) from the previous year. The 2023 corn crop estimate was raised 2.6 MMT to 284.84 MMT. The ministry increased its 2022-23 soybean import forecast 4.66 MMT to 99.86 MMT, which would be up 8.26 MMT (9.0%) from last year. The 2023-24 soybean import forecast was raised 3.03 MMT to 97.25 MMT.

France lowers wheat crop estimate... France’s ag ministry cut its 2023 wheat crop estimate by 450,000 MT to 35.14 MMT, though that would still be 4.3% higher than last year and 2.2% above the five-year average. The ministry didn’t provide a reason for the reduction, though the crop struggled with dryness early in the growing season and heavy rains ahead of harvest in northern areas of the country.

Kremlin: Grain deal ‘on hold,’ no progress yet... Kremlin spokesman Dmitry Peskov said the Black Sea grain deal was on hold, and there had been no progress in restarting it, Russian state news agency TASS reported. Turkey and the United Nations have been trying to get Russia to restart the deal after Moscow ended the initiative in mid-July.

Chinese buyers betting Aussie cotton ban will end soon... Buyers including a state-owned Cotton Group Corp are stockpiling Australian cotton in Chinese warehouses, betting that a three-year ban on imports will soon be lifted, Reuters reported. Chinese customs data shows that 43,364 MT of Australian cotton entered bonded warehouses in China in the first seven months of this year, more than double all of 2022. An additional 1.148 MMT cleared customs.

Packers managing tight cattle supplies... Cash cattle averaged $182.28 last week, down 22 cents from the previous week, marking the fifth straight weekly decline. While packers purchased only 57,000 head of cattle, including 12,000 “with time,” most plants aren’t running Saturday kills, which is allowing them to manage tight market-ready supplies without having to actively bid for cattle. But premiums in futures signal traders anticipate the string of lower cash prices will end soon and be followed by a lengthy period of cash market strength.

Cash hog index stabilizes, pork cutout firms... The CME lean hog index is down a dime to $86.17 but has stabilized following the five-week string of price pressure. The pork cutout value firmed $1.65 on Monday, led by a $5.86 jump in primal bellies, though all cuts except picnics rose.

Overnight demand news... South Korea purchased 40,000 MT of Canadian milling wheat and 55,000 MT of optional origin feed wheat. Japan is seeking 118,490 MT of milling wheat in its weekly tender.

See ‘Policy Updates’ for late-breaking morning news updates... For updates to items in “First Thing Today” or any late-breaking morning news stories, check “Policy Updates” on www.profarmer.com.

Today’s reports

• 11:00 a.m. Crop Production — NASS
• 11:00 a.m. WASDE — WAOB
• 11:00 a.m. Cotton Ginnings — NASS
• 11:15 a.m. Cotton: World Markets and Trade — FAS
• 11:15 a.m. Grains: World Markets and Trade — FAS
• 11:15 a.m. Oilseeds: World Markets and Trade — FAS
• 11:15 a.m. World Agricultural Production — FAS